After a mid-year budget review found that the operations of the National Credit Union Administration (NCUA) have been running at about eight percent below their originally budgeted levels during the first half of 2010, Chairman Debbie Matz announced last week that the agency’s budget for this year has been reduced by about $2 million.
“We are well aware that credit unions are under enormous pressure to generate positive earnings this year,” said Matz, as she announced the budget cuts at last week's NCUA board meeting. “This is particularly difficult at a time when credit unions are paying assessments, which are required to cover other credit unions’ losses. So we have done our due diligence to ensure that any new item in the budget will be a prudent use of agency resources and credit union funds.”
NCUA’s actual spending – by its central and regional offices – for the first six months of 2010 was $91,631,201 – an eight-percent under-budget variance. The agency is now projected to spend a total of $198,923,512 for all of 2010. The agency had originally been budgeted to spend about $200,900,512 for all of 2010.
Staffing vacancies account for most of the unused 2010 funding. The total budgeted staffing level for the agency is 1,128.85 Full Time Equivalent (FTE) employees.
The mid-year budget review allowed NCUA to make various budget adjustments, with funding trimmed from some programs and redirected toward other programs. The planned reductions of about $9.2 million will exceed about $7.2 million worth of new initiatives, resulting in the projected budget savings of about $2 million.
The most significant new initiative – to be managed by the agency’s Office of Public and Congressional Affairs – will be a major consumer education campaign that will broaden public awareness of the federal share insurance program. The nationwide campaign is projected to cost $1.7 million.
The campaign, aiming for a September launch, will include television, radio, print, and companion advertisements. Designed to strengthen consumer confidence in the nation’s federally insured credit union system, the campaign will reassure consumers that their money – up to $250,000 per account – is safely insured through the National Credit Union Share Insurance Fund.
The campaign plans to feature CNBC’s personal finance expert Suze Orman as its spokesperson. A 30-second and a 60-second television ad are planned.
“All of you who have seen ‘The Suze Orman Show’ on CNBC know that Suze really lights up the screen. She comes on the air with amazing energy and tremendous passion,” said Matz. “When she speaks directly to consumers, she serves as their trusted financial advisor. She makes complex financial issues sound perfectly clear.”